United States oil trims losses as crude supplies fall for third straight week

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Brent crude futures, the global benchmark for oil prices, were trading at $56.75 per barrel at 0649 GMT, up 14 cents, or 0.25 percent, from their last close.

Prices rose 2 percent the day before to back above $50 a barrel. Platts survey showed analysts expecting a draw of 1.4 million barrels in gasoline and a draw of 1.64 million barrels in distillate stocks.


The price action in the crude oil markets on Thursday suggests investors were more concerned about future demand than the weekly inventories picture. Though Brent and WTI futures were responding negatively to the crude stock-build reported by the API early Thursday, the market will be looking to the corresponding EIA data later in the day for validation.

Though the 2017 figure was lower than the forecast in EIA's September report, the 2018 growth projection was revised upward to 9.922 million b/d, or a year-on-year jump of 680,000 b/d, versus the 9.84 million b/d forecast a month ago.


USA crude inventories are still 13 percent above five-year averages headed into the busy winter season, despite efforts by OPEC to cut production. But traders say supplies remain ample and OPEC is widely expected to extend its cuts beyond the current expiry date of end-March 2018.

US exports fell in the most recent week to 1.27 million bpd, but USA exports have still exceeded 1 million barrels a day for three straight weeks, the first time this has happened.


High U.S. production is pushing increasing volumes of U.S. crude into world markets, feeding inventories and undermining OPEC's efforts to tighten the market. From this we can conclude that the outlook for the market over the near-term is likely to be bearish because of the forecast for lower oil demand in 2018.

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